Healthcare startups tapping into wellness sector to stay fit

There are 80 players in the doctor appointment-booking space, and an equal number of firms (75 companies) in the beauty and wellness space.Krithika Krishnamurthy | ET Bureau | November 14, 2015, 05:57 IST

There are 80 players in the doctor appointment-booking space, and an equal number of firms (75 companies) in the beauty and wellness space.BENGALURU: It is human nature to not want to visit a hospital or go to the doctor. It is this conundrum that is pushing health-tech companies focused on doctor appointments to expand into the wellness sector with bookings for spas and salons.

“Beauty is now our anchor vertical,” said Shantanu Jha, chief executive of Ziffi, which in May pivoted from its five-year-old doctor-appointment service called DocSuggest. Unlike with doctor appointments, “people need (beauty and wellness) services on a monthly basis”.

Practo, Asia’s largest online healthcare platform, too, is set to launch a wellness unit for bookings at spas and salons in a few weeks, a spokesman said. Medical app Lybrate sees most users on its platform engaged in discussions on wellness than on other health topics.

Booking appointments with doctors is mostly a one-off activity, and yet to be monetised by health-tech firms, which make money primarily from selling appointment management software to doctors. In the wellness space, experts said, these firms are able to negotiate a commission for bringing in customers to salons and spas, making for a steady revenue stream and putting them in competition with home service companies.

Jha said Ziffi is the largest beauty marketplace in India with 5,000 salons and spas. The company’s beauty business has increased 50 times in the six months since launch, he said.

“The good part is there is scope of more transactions and not much regulation,” said Jha. In addition to wellness, Ziffi continues to have 22,000 doctors, 600 pathology labs and 8,000 hospitals using its platform. The company started in Mumbai in 2009 and is now present also in Bengaluru, Hyderabad, Pune and New Delhi.

For Lybrate, many of the queries by its 2 lakh monthly users relate to women’s health, dermatology and other wellness issues, said Saurabh Arora, CEO of the two-year-old firm.

Lybrate, which recently raised $10.2 million (Rs 68 crore) from Ratan Tata, Tiger Global and others, allows users to post queries to specialist doctors in more than 50 categories such as gynaecology and oncology, several of which convert into appointments.

Practo declined to give more details on the launch of its wellness segment. “Wellness has a positive feeling of healthcare while doctor appointment evokes a negative feeling,” said Mayur Sirdesai, director at Somerset Health Capital Advisors, a healthcarefocused private equity firm in Mumbai. “This is a big category because for most people looking good is more important than feeling good.”

Salons are an untapped segment in India. The Wellness Sector report released by KPMG last year projected India’s beauty and wellness market would nearly double to Rs 80,370 crore by 2017-18 from Rs 41,224 crore in 2012-13.

CHANCE TO LOWER COSTS

The value that technology firms such as Ziffi and Bookmyspa offer salons and spas is a chance to lower costs, as these establishments otherwise spend a significant chunk of their revenue on promotions. “If an online platform can eliminate customer-acquisition costs, salons will be willing to share a portion of their revenue,” said Sirdesai. “It makes a lot of sense for a company to have the back-end (vendorsoftware) as well as the front-end (appointment booking), as vendors would use the product if it also brought them more customers,” said Sriharsha BK, founder of Bookmyspa, who sold his firm to Gomalon for about Rs 12 crore last week. India is seeing the emergence of two different kinds of players chasing the same set of customers from opposite ends of the spectrum. While players such as Ziffi, Vyoma and Purplle bring customers to salons, the likes of UrbanClap, HouseJoy, Belita and Stayglad take beauty professionals to one’s house.

There are 80 players in the doctor appointment-booking space, and an equal number of firms (75 companies) in the beauty and wellness space, according to startup data tracker Tracxn. Experts said expertise in these verticals will also help doctor appointment-booking companies net more revenue. “If you go after higher-ticket items which have more specialisations, your margins and revenue generation capability is better.

The same is for offline space: Compared with a primary or a secondary health centre, the tertiary health centre always makes more money,” said Sirdesai.

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